Investment mantra: To match the investment horizon of the fund with the investment objective. A liquid fund, for instance, will keep liquidity as the primary objective rather than the returns.
Best call over the past few months: Creating a liquid fund portfolio, which could manage redemptions without borrowing.
Worst call over the past few months: Missing the gilt rally. We did not expect such large rate cuts and didn’t know how long the rally would sustain.
Top picks right now: Long-term corporate bonds as well as power bonds like REC, PFC and NTPC.
View on interest rates: The G-sec yields may go down in the current year as the growth in economy slows. The 10-year G-sec yield may decline to 6.75%.
Debt funds to be recommended: For the short term, consider liquid funds. If the time period is one year, invest in income funds, which could give you returns of 10-10.5%. Go for FMPs if your investment horizon matches the duration of the FMP.
Advice to small investors: Debt investments are not risk-free, though the risk is lower. Also, there is always a liquidity risk during uncertain times.
— Kumar Nathani, Fund Manager, Fixed Income, Taurus Mutual Fund